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Alberta Consumers the Biggest Losers in New Beer Mark-up Policy

CALGARY, July 12, 2016 /CNW/ - The Government of Alberta's new plan to set the province's beer mark-up at $1.25 per litre is a shockingly short-sighted policy change that will result in higher beer prices across the province.

The announcement is a windfall for the massive, foreign-owned multinational brewers that already controlled more than 77% of the Alberta market share.

"Don't be fooled by the nice sentiments in the government's statement about treating all brewers equally," said Michael Micovcin, president and CEO of Great Western Brewing Company. "Setting the mark-up rate at $1.25 per litre - the current rate for the foreign-owned multinational brewers -- will do nothing but raise the cost of beer supplied by smaller, regional Canadian breweries such as Great Western that now represent a significant and growing market segment."

The value priced beer segment in Alberta is very significant, approaching 40% of total beer in the province. Small regional breweries like Great Western that supply value priced beer to Alberta consumers will be forced to raise prices to offset the higher mark-up. Alberta consumers should expect to see the price of some value priced beers to increase by upwards of 25%.

"The government may think that Alberta's micro-craft breweries will supply that market space, however, they do not sell beer in the 'value' segment," said Micovcin. "The result will be more expensive beer at a time when Albertans can least afford to pay more."

Alberta consumers will ultimately pay more and have less choice.

The announcement may also have significant trade implications for the province, as the announcement states that government grants or subsidies will be provided only to Alberta brewers.

The Government of Alberta has not been forthcoming with details related to the new policy, leaving many unanswered questions for regional brewers and consumers. Micovcin expressed frustration with the lack of consultation with regional brewers in advance of the announcement.

"We tried repeatedly to meet with Minister Ceci over the past several months and were denied," he said. "We urge the government to reveal the details of their plan and the true impact it will have on Alberta's beer consumers."